April 23rd, 2025 – FrieslandCampina Engro Pakistan Limited (FCEPL) announced its financial results for the first quarter ended March 31, 2025.
Operational and Financial Highlights
The Company continued to navigate a tough operating environment post the imposition of sales tax on UHT milk, effective July 1, 2024. The lack of a level playing field versus loose milk drove packaged milk volumes downward, shifting consumption toward unsafe loose milk.
- Net sales declined by 5.3% to PKR 26.0 billion (Q1 2024: PKR 27.5 billion).
- Profit after tax improved to PKR 420 million, driven by reduced finance costs, optimized working capital, and lower interest rates.
Despite lower volumes, the Company maintained its focus on cost optimization, operational efficiencies, and disciplined expenditure management, ensuring a self-funding business model to continue its mission of converting consumers from loose milk.
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Segment-Wise Performance
Dairy-Based Products Segment
- Revenue stood at PKR 23.7 billion, a 9.1% decline compared to the same period last year.
- The drop was primarily due to the impact of sales tax on UHT milk.
Frozen Desserts Segment
- Revenue surged to PKR 2.28 billion, reflecting 67.7% growth over Q1 2024 (PKR 1.36 billion).
- Growth was supported by Eid falling in Q1 and sustained momentum from the previous year.
Financial Performance Summary (Q1 2025 vs. Q1 2024)
| Financial Metrics (Rs. in million) | Q1 2025 | Q1 2024 | Variation |
|---|---|---|---|
| Net Sales | 26,016 | 27,464 | -5.3% |
| Operating Profit | 2,222 | 1,971 | +12.8% |
| Operating Profit Margin (%) | 8.54% | 7.18% | +137 bps |
| Profit After Tax | 1,085 | 665 | +63.2% |
| Net Profit Margin (%) | 4.17% | 2.42% | +175 bps |
| Earnings Per Share (Rs.) | 1.42 | 0.87 | +63.2% |
Future Outlook
- The sales tax on UHT milk remains a challenge, reducing affordability and impeding growth in the formal dairy sector.
- The Company will continue engaging with key stakeholders to advocate for tax reforms aligned with global benchmarks, ensuring fair competition with loose milk.
- Leveraging FrieslandCampina’s 150+ years of dairy expertise, FCEPL remains committed to quality, safety, and sustainability, providing millions of Pakistanis with safe, nutritious, and affordable dairy products.
Annual General Meeting (AGM) Update
The Annual General Meeting was held on April 21st, 2025, at the Royal Rodale in Karachi, where shareholders and the Board of Directors reviewed FCEPL’s 2024 performance.